Productivity is a big deal in today’s business world. Employers want to know that their employees, while they are on the clock, are spending more time working than they are doing anything else. Even in a traditional office setting, that can be difficult. Sapience Analytics has a way to make that task a little easier.

Sapience, its eponymous product, enables companies to achieve 15%, 20% or even greater gains in work output. This is achieved without requiring any change in process or additional management overhead. Sapience is an enterprise class product that supports automated deployment and upgrades, and it connects to the organization’s internal applications such as ERP and HRIS for maximum benefit. Detailed analytics of work time is possible on multiple enterprise dimensions such as verticals, domains, technologies (for projects and business units), and roles, skills, and locations (for employees and teams).

The company believes that deployment of Sapience can have a transformational impact on delivery capability and profitability, potentially delivering annual gains of over $1 million per 100 employees. It is meant for companies whose staff members use computers to perform their jobs. It provides ‘automated work visibility’ across the enterprise hierarchy. By delivering actionable advisories to individual employees and managers, work output can be increased at every level. Employees can ensure that work hours are reasonable, teams can focus more on key activities, and senior management can optimize staffing in business units and projects based on observed workload. The company was named by NASSCOM as a 2012 Top 10 ‘Made in India’ Enterprise Product Company, and by Red Herring as a 2011 Asia Top 100 technology company.

Sapience Analytics was founded in 2009 by four serial entrepreneurs who had several years of technology and management experience at global software companies. Originally named InnovizeTech Software, the company changed its name Sapience Analytics in 2012 to match that of its product.

Company CEO and co-founder Shirish Deodhar graduated from IIT Bombay and got his master’s degree in the U.S. After working in the U.S. and India for several years, he started a company, Frontier Software, in 1989 in outsourced software product development. Frontier was acquired by one of its early customers, VERITAS Software (now part of Symantec).

In 2008, the co-founders concluded that IT services had become a commodity business and that the future of Indian IT belonged to product ventures. They decided to build a solution to address the productivity of remote teams, since it has become a key issue in assessing the value proposition of a remote subsidiary and for teams at outsourcing vendors.

In mid-2009, Shirish’s wife and co-founder, Swati Deodhar, came up with a prototype with an integrated dashboard displaying software engineering metrics aggregated and analyzed from different tools. While brainstorming, the founders realized that it would be too expensive to build since one had to support a large number of evolving tools from many vendors. But the underlying platform addressed a more fundamental and universal issue. This had to do with visibility into how employees and teams went about their assigned work. Absence of work visibility makes it difficult to increase work output, and hence productivity. You can only improve what you can measure, say the founders. But contemporary practices of flexible office hours, work-from-home policies, globally distributed teams, contractors, and outsourcing exacerbate the problem of measurement.

The founders were surprised to note that they had no competition in the space of “automated enterprise effort visibility.” This was a unique situation to be in, but created its own challenge of having to create and educate the market.

Sapience remains the only product available globally that delivers enterprise class automated time/effort analytics. The company’s closest competition is from the several employee monitoring tools in the market. These include products such as RescueTime, ManicTime, oDesk, Cyclops 360, and so on. They are primarily used to track user time on applications and websites, on a daily basis. They provide some aggregation of time on different application categories, user time on weekly and monthly bases, and group level statistics. Some of them even capture screen shots, and many of them support installation of the tracking agent by stealth. However, they all deliver only limited insights about collective effort, and are not designed for the variations and scale required by medium and large enterprises.

The company’s biggest challenge has been to highlight the fact that Sapience is not intended to be an employee monitoring tool. Every company wants to raise the performance bar. Sapience provides insights into the quantity and efficiency of collective effort. This results in significant work output gains, thereby improving the company’s bottom line. At the same time, Sapience protects and respects individual privacy by masking all personal time on the PC.

The founders are meeting the challenge of differentiating Sapience with focused messaging, listening to employee and management feedback from early installations, and building features to ensure that individual data is respected, and even hidden, while generating work visibility for managers to obtain efficiency gains. Sapience does not change corporate culture, but adapts to it.

As a small company, Sapience Analytics had to focus on India as a market to create initial traction while keeping sales and support costs at a reasonable level. India is a very difficult market in which to sell enterprise products, especially from a start-up, and even more so for a ‘Made in India’ product. The founders have to thank innovative leaders at some companies for signing up as early adopters to run product trials, and then purchase Sapience.

In late 2010, the first release was picked up by companies such as IdeaS (SAS subsidiary), Excelize, and EnVenture. These were all 75 to 150 user license deals. The next step was to persuade larger 2,500+ employee companies. In mid-2011, senior management at Zensar and KPIT gave Sapience its initial break into the medium sized segment. By early 2012, the company got its largest license deal with Tech Mahindra, which is one of the top 10 Indian IT companies. A large order from another top 10 IT company followed not long afterward. Sapience targets segments such as ISVs (product companies), KPOs and non-voice BPOs, engineering services, back offices in banks, insurance companies, retail companies, global customer outsourcing to vendors or subsidiaries on a time and material basis.

The Sapience sales cycle is generally three to six months. If a prospect does not initiate a trial or does not buy the product, it is usually because he has many employees who are mostly in the field or on phones, or it’s because of concerns among middle management about the impact on employees. As Sapience becomes more widely accepted, many of the latter are future customers.

Sapience Analytics has a total addressable market of $600 million, based on a $100 per user model. The addressable market (inclusive of BPO/KPOs, engineering services, and IT centers at non-software enterprises) is worth conservatively at least three times that, or $1.8 billion.

The company has earned $1.5 million in revenue each year since its inception, and expects to do the same or better in 2012. It charges a list price of $240 per user per year for the Sapience hosted cloud-based server. The company also offers an on-premises option and charges extra for the Sapience server.

The co-founders bootstrapped for the first one and half years, using their own money. Then in July 2010, they received $350,000 from the Indian Angel Network, and in November 2011, they received another $1 million in Series A funding from Seed Enterprises.

The company currently has cash in the bank, but the founders are considering additional funding for an aggressive sales effort in the U.S. They believe there is a good opportunity with global firms that outsource IT applications and support services on a time and material basis.

The founders have a multi-dimensional “expanding Web” growth strategy that includes product functionality and scale – trying to become the standard for automated enterprise effort visibility. In order to support enterprises with 100,000 employees, the company must have product enhancements in areas such as performance, CxO reports, multilocation customization, smart installation, and continuing maintenance. Sapience Analytics must also cover other platforms including Linux, iOS, smartphones, calendaring tools and integrate with third-party presence servers.

It has taken a long time for India to produce some software product companies. It is great to see Sapience emerge into a fully validated, revenue-generating enterprise software company from India.